The rise of crypto laundries: how criminals cash out of Bitcoin • Hacker News Board

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#131

Post by vmception » Fri, May 28, 2021, 3:27 PM UTC

vyrotek wrote: post #126

After learning about how expensive stolen art is exchanged as a proxy for cash from "This is a robbery" on Netflix I started to wonder if laundering is really needed with crypto. There are probably clever ways to just exchange wallet ownership instead.

Yep. Anybody that is watching funds move across addresses has no idea what they are doing. They rely on assuming that the funds still have the same ultimate beneficial owner (UBO) who is trying to hide, when that couldn’t be further from the truth.

Anybody that claims they know is just trying to scam a government for a lucrative blockchain analysis contract. Just another crypto entrepreneur aiming to leak fiat out of the system, even while pretending to act like an adversary to crypto users.

The reality is that:

A) the UBO either isn't trying to hide because they can acquire the goods and services they want without laundering (other tokens, governance control of a crypto network, passive income, digital art, using the dirty funds to pump other tokens that they already own with clean money allowing them to derive entrepreneurial or trading genius benefits)

B) the UBO know they can launder whenever they feel like it or get around to it

C) the funds have already changed UBOs to people that were not involved and shouldn't be tracked, because A) and B) already happened onchain or offchain

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#132

Post by vmception » Fri, May 28, 2021, 3:28 PM UTC

digianarchist wrote: post #130

vmception wrote: post #128

The XMR to sXMR bridge is live and applauded by both the Monero community and Secret Network community Secret Network also has an AMM called SecretSwap for exchange to any other asset All smart contract execution on the secret network is private, as in the variables and current state is not stored on chain for perusal, all assets are smart contracts

Is the Monero community still working on atomic-swaps? If the can pull that off it would make it very difficult to trace money laundering activities.

This would be one rendition of one

It is more so that the Secret Network is able to basically shard a Monero multi-signature address across the SGX chips that the validators are required to have, and from consensus mint or burn sXMR when XMR is deposited or withdrawn

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#133

Post by irtigor » Fri, May 28, 2021, 3:32 PM UTC

wpietri wrote: post #121

seanhunter wrote: post #119

Earlier quoted context omitted.

Money laundering is linked to criminal activity by definition. It literally means introducing the proceeds of criminal activity into the legitimate financial system. https://www.investopedia.com/terms/m/moneylaundering.asp

I think that's a good general definition. But sometimes people want to move capital unlinked to crime across borders. They then use exactly the same mechanisms money launderers use. If you have a term for that you like better, I'd be interested to hear it.

That's only true if they are trying to avoid taxation, which is also ilegal (even if you think it is justified). Moving capital from a place to another doesn't use the same mechanisms of money laundering if done legally.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#134

Post by aqme28 » Fri, May 28, 2021, 3:36 PM UTC

flotzam wrote: post #33

m00dy wrote: post #13

I can tell one of the ways that is missing in the article. Let's say, you have a lot of Bitcoins and your buddy is a bitcoin miner. You craft your transaction such a way that you put all your coins as transaction fee. You send your transaction only to your buddy. Your buddy picks it up and solves the puzzle afterwards. Fees will be converted to brand new coins.

Brand new coins, but wouldn't they still look suspicious if the block's coinbase is outlandishly large?

That used to be common before wallets got better. People would accidentally set the fee way too high every once in a while.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#135

Post by aqme28 » Fri, May 28, 2021, 3:38 PM UTC

Taek wrote: post #50

alcio wrote: post #29

Earlier quoted context omitted.

yes, you can email it to your miner buddy. it's possible to spot such transactions if they violate transaction forwarding rules (aka standardness rules) but not consensus rules. for example, a transaction greater than 100kB is not standard but still valid.

Law enforcement watches the mempool, they can spot such transactions anyway because they know it didn't ever show up in their mempool logs.

There will always be discrepancies due to e.g. latency of the network.

Just pretend you sent that transaction a millisecond before it was mined.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#136

Post by DennisP » Fri, May 28, 2021, 3:44 PM UTC

vyrotek wrote: post #126

After learning about how expensive stolen art is exchanged as a proxy for cash from "This is a robbery" on Netflix I started to wonder if laundering is really needed with crypto. There are probably clever ways to just exchange wallet ownership instead.

The trouble is, there's no way to know that the seller threw away their copy of the private key.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#137

Post by decafninja » Fri, May 28, 2021, 3:44 PM UTC

iSloth wrote: post #124

CryptoPunk wrote: post #114

Earlier quoted context omitted.

If a tax requires the entire citizenry surrendering all of their financial privacy, it should be abolished.

And shortly after all countries would collapse...

To some, that is probably a desired feature, not a bug.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#138

Post by MikeDelta » Fri, May 28, 2021, 3:46 PM UTC

CryptoPunk wrote: post #114

MikeDelta wrote: post #39

Earlier quoted context omitted.

I understand your point. However, privacy cannot shield one from tax and legal obligations. It is not just the proceeds from criminal activities, but also tax evasion (from the rich or companies) and terrorism financing.

If a tax requires the entire citizenry surrendering all of their financial privacy, it should be abolished.

What system would be fair and acceptable to you?

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#139

Post by vmception » Fri, May 28, 2021, 3:52 PM UTC

DennisP wrote: post #136

vyrotek wrote: post #126

After learning about how expensive stolen art is exchanged as a proxy for cash from "This is a robbery" on Netflix I started to wonder if laundering is really needed with crypto. There are probably clever ways to just exchange wallet ownership instead.

The trouble is, there's no way to know that the seller threw away their copy of the private key.

The point is that crypto can operate in a temporarily trusted environment. The subsequent owner does need to rotate addresses as soon as possible. It is the blockchain analysis that can't tell the difference between the prior owner moving to another address that prior owner controls, or a different owner moving addresses.

Re: The rise of crypto laundries: how criminals cash out of Bitcoin

#140

Post by jb775 » Fri, May 28, 2021, 3:52 PM UTC

auntienomen wrote: post #26

ccity88 wrote: post #14

I get that money laundering is always linked to criminal activity, but how have we always just accepted the lack of personal privacy when it comes to finance? Privacy is a feature, not a bug; and whilst crypto may not be the way forward, I hope one day we can reach a solution that has both privacy and also safety. The language used by law enforcement is quite alarming, it suggests that they should be privy to ALL tra…

If you don't interfere with money laundering, the criminals eventually acquire enormous wealth, and with it power. They eventually acquire enough power to take over the government. At that point, you're at their mercy, and theorizing about privacy laws becomes a bit pointless.

This has already happened.

They typically launder money via "foundations" or "charities". They acquire power by purchasing media companies. They use the media companies to control public narratives to shift the Overton window of public policies. They also use it to manipulate the truth as it suits them[1]. Their target population for controlling thought narratives are yuppies and the lower classes.

[1] https://mobile.twitter.com/DrewHolden360/status/139733532441...